What Is FIRE (Financial Independence, Retire Early)? Meaning & Example
Definition
FIRE is a lifestyle goal of saving and investing aggressively to reach financial independence, often well before traditional retirement age. It typically relies on high savings rates and low-cost investing.
Related terms
Net worth is the value of everything you own minus everything you owe. Tracking it over time shows overall financial progress.
Compound InterestCompound interest is interest earned on both your original money and the interest already added to it. Over long periods it can make savings grow much faster than simple interest.
Passive InvestingPassive investing aims to match market returns by holding broad, low-cost funds rather than picking individual winners. It involves little trading and low fees.
What is FIRE (Financial Independence, Retire Early)?
FIRE is a lifestyle goal of saving and investing aggressively to reach financial independence, often well before traditional retirement age. It typically relies on high savings rates and low-cost investing.
Can you give an example of FIRE (Financial Independence, Retire Early)?
A FIRE follower might aim to save 50% of income and invest it until their portfolio covers living costs.